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Cagamas conducts RM450m in issuances to purchase mortgage loans from financial system

KUALA LUMPUR (March 20): Cagamas Bhd has conducted RM450 million in issuances, which will be used to fund the purchase of mortgage loans from the financial system.

In a statement today, the national mortgage corporation said the issuances are composed of RM300 million in two-year conventional medium-term notes (CMTNs) and RM150 million worth of three-month conventional commercial papers (CCPs).

“The pricing of the bonds was concluded at a time of highly volatile global financial markets arising from the plunge in oil prices and threat of the COVID-19 pandemic. There is a risk-off and cautious sentiment in the market as evidenced by the broad-based selling activities in both global equity and fixed income markets including Malaysia. This is definitely a challenging time for the local and global economy,” said president and chief executive officer, Datuk Chung Chee Leong.

Chung added that during this unprecedented period, Cagamas will continue to play its role as a liquidity provider to the financial system with the successful conclusion of the CMTNs and CCPs via a private placement exercise.

The CMTNs were concluded and priced at 3.03%, which is 33 basis points (bps) above Malaysian Government Securities (MGS). The CCPs were priced at 5bps above the three-month KLIBOR rate or equivalent to 2.83% on their pricing date.

The papers will be redeemed at their full nominal value upon maturity and are unsecured obligations of Cagamas, ranking pari passu among themselves and all other existing unsecured obligations of the national mortgage corporation. They will be listed and tradable under the Scripless Securities Trading System.

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